Houses the solid performer as units weaken in QLD

Felicity Moore

13/03/2017

The Queensland housing market has shown moderate growth throughout 2016, with a final quarter that revealed strong results for houses in the southeast corner and a weaker result for units, according to the REIQ Queensland Market Monitor: December 2016 quarter report.

The Brisbane LGA median house price grew 1.6 per cent this quarter, to a new high of $655,000.

The annual median house price grew 4.1 per cent over the past 12 months and REIQ CEO Antonia Mercorella said the Brisbane residential house market was a dependable performer.

“This is the consistent, sustainable growth that the Brisbane house market has become known for and it is great that it’s such a solid performer,” she said.

The unit market performed less well, falling 4 per cent this quarter, with supply issues finally gaining traction that many had forecast. However, over the past 12 months the unit market has only fallen 1.1 per cent and over the past five years the market is still in positive territory, having grown 11.3 per cent.

“These supply issues have, as expected, had a small impact on prices, however, we know that the market is an excellent self-regulator and developers are already scaling back projects scheduled for this year and 2018,” Ms Mercorella said.

The strength of houses and the weaker performance of the unit market was a consistent theme throughout much of the state.

Ipswich: The Ipswich median house price increased marginally this quarter, by 0.8 per cent, to $332,700. This market is holding steady. While it has only grown by a slender 0.9 per cent over the past 12 months it is about 5.5 per cent higher than five years ago.

The Ipswich unit market is much more volatile than the house market and this is partially due to the stuttering nature of supply coming onto the market. The median unit price fell 10.6 per cent this quarter, to $272,750, however, over the past five years the market is still showing modest growth of 7.1 per cent.

Logan and Moreton Bay: Logan and Moreton Bay houses were the strongest growth markets in the Greater Brisbane region this quarter, with Logan’s median house price growing 2.4 per cent to $384,500 and Moreton Bay’s median house price growing 1.8 per cent to $422,250.

Logan’s unit market is the most affordable in Greater Brisbane and fell 1 per cent in the December quarter, to $250,500.

Moreton Bay’s unit market fell 2.9 per cent this quarter, however, with a median price of $330,000 it remains the second-most expensive unit market in Greater Brisbane after Redland.

Redland: The Redland house market is the cream of the Greater Brisbane crop. With a quarterly median house price of $510,000, even though this market showed zero growth over the quarter, it remains the most expensive house market after Brisbane LGA. The Redland annual median house price grew 4 per cent over the year, which is similar to Brisbane LGA levels, and has grown almost 15 per cent (14.8 per cent) over five years.

Similarly, the unit market is also the most expensive in Greater Brisbane. Even though the quarterly price fell a startling 10.2 per cent in just one quarter, the market is 7 per cent higher than it was five years ago. It would be fair to say this is a fragile market at the moment.

Gold Coast: The Gold Coast house market has outperformed almost every region in Queensland over the past 12 months, with the annual median house price growing 5.8 per cent to $575,000. Only the Sunshine Coast outstripped this market for annual growth. The Gold Coast market also had a strong quarter, growing 2.6 per cent to reach a quarterly median of $590,000.

The Gold Coast unit market bucked the state-wide trend of falling unit prices, adding 1 per cent over the quarter and 5.5 per cent over the past 12 months. The continued massive infrastructure and construction programs have attracted workers and been a significant driver of population growth.

Toowoomba: Over the past five years Toowoomba has been a solid performer, with its residential housing and unit market adding between 21 and 23 per cent price growth. However, we see this market as potentially levelling off as demand begins to contract.

The median house price grew just 0.9 per cent this quarter, to $355,000 and over the past 12 months the market has fallen 1.1 per cent.

The Toowoomba unit market has stalled with just 0.4 per cent growth this quarter and a fall of 0.2 per cent over the past 12 months. The quarterly median unit price is $290,000.

Sunshine Coast: The Sunshine Coast LGA has taken first prize for market growth this quarter and for the year. The market grew 4.8 per cent this quarter, to a median house price of $545,000 and a hefty 6.1 per cent for the year. Over the medium term, (five years), it is 20.7 per cent higher.

The unit market has held its own in a climate of strong supply, and although it only grew 0.2 per cent, to a median price of $375,750 this quarter, it added a respectable 1.6 per cent for the year and is 10.3 per cent higher than it was five years ago.

Fraser Coast: As we move into regional Queensland the markets move from robust to challenged. The Fraser Coast median house price fell 2.3 per cent for the quarter, to $303,000 and over the past 12 months it has demonstrated zero growth (and no contraction either). Five years ago the annual median house price was $285,000 which means it has grown 7 per cent over five years. This is modest growth.

The unit market in the Fraser Coast is very small, with just 52 sales this quarter. The median unit price fell in the December quarter, by 6.7 per cent, to $230,000 and this makes it one of the most affordable markets in Queensland. Only Cairns, Mackay and Gladstone have more affordable unit markets.

Bundaberg: Bundaberg has had an extraordinary quarter, with the quarterly median house price growing by a significant 14.1 per cent to $291,000. This brings the market back to almost where it was five years ago. In 2011 the annual median house price in Bundaberg was $278,000, which is just 1.1 per cent higher than the annual median house price today of $275,000.

The unit market has been somewhat volatile over the past 12 months and by December 2016 the quarterly median unit price, off just 28 sales, was $235,000 which is a market contraction of 6 per cent. Looking to the medium term data, Bundaberg unit prices in 2011 were 6.7 per cent higher than in 2016.

Gladstone: The Gladstone median house price fell 3.2 per cent this quarter, to $290,000 and over the past 12 months, the market has lost 10.7 per cent.

The unit market fell 20.3 per cent, to $185,000.

This market continues to feel the impact of the resources downturn and news last week that the Boyne Island smelter was scaling back production levels and reducing its staff by up to 100 workers due to soaring electricity costs will only add to market pressures.

Rockhampton: Despite some promising signs in the September quarter, the December quarter brought more pressure on the Rockhampton quarterly median house price, with a fall of 5.9 per cent to $273,000. This market has fallen 5.2 per cent this year and 10.8 per cent over five years and is now the most affordable market measured in the QMM report.

The unit market was too small to record a median unit price, with just 16 transactions this is not a meaningful sample size.

Mackay: While there is good news on the horizon with Mackay being named a FIFO base for the Adani mine, the market is still finding its footing. The quarterly median house price of $318,000 is just 0.2 lower than the September quarter. However, this market remains 20.9 per cent lower than five years ago, when the median house price was $411,000.

The unit market is small, as it is in almost every regional Queensland town. The quarterly median unit price of $200,000 (off 32 transactions) is 6.3 per cent lower than the September quarter. The market is 18.2 per cent lower than 12 months ago and 29.9 per cent lower than five years ago, when the median unit price was $321,000.

Townsville: The Townsville market has had a buoyant final quarter of 2016, with the median house price growing an impressive 4.6 per cent to $345,000. The area is set to benefit from considerable infrastructure and government spending programs, including the $250 million football stadium and planning for the $1.6 billion Port of Townsville project, which will help employment figures and stabilise business confidence.

The unit market held steady this quarter at $260,000 and while there was zero growth this quarter there was also zero contraction. Unfortunately, the market has contracted 4.3 per cent over the year and compared with five years ago, has contracted 16.2 per cent.

Cairns: The Cairns market is one of the few regional markets that has performed moderately well over the past five years. The quarterly median house price did not grow this quarter, holding steady at $395,000, but compared with 2011, has grown 12.2 per cent.

The unit market fell 6.1 per cent over the quarter to $225,000, however, for the year the market has grown 4 per cent and has grown 6.8 per cent over the past five years. This is remarkable when compared with other regional unit markets.